London Professional Hiring Slows Sharply in Q3 as Employers Grow More Selective, Says Morgan McKinley

Morgan McKinley’s 2026 London Employment Monitor reports a significant drop in finance sector vacancies, declining from 1,719 in July to just 1,200 in September, as employers adopt a more cautious approach to new hires.

The report highlights:

• 6% decrease in job openings quarter-on-quarter (Q3 2026 vs Q2 2026)
• 11% decrease in job openings year-on-year (Q3 2026 vs Q3 2025)
• 30% decrease in job openings between July and September 2026, with monthly vacancies falling from 1,719 to 1,200

According to the latest Morgan McKinley London Employment Monitor, professional job vacancies in London dropped to 4,368 during the third quarter of 2026, marking a 6% decline from the previous quarter and an 11% decrease compared to the same period last year.

– Advertisement –

“The third quarter of 2026 shows vacancies fell 6% compared with Q2 and 11% year-on-year, but these quarterly figures mask a much sharper deterioration as Q3 progressed,” commented Mark Astbury, Director at Morgan McKinley. “Monthly vacancies decreased from 1,719 professional positions in July to 1,449 in August and just 1,200 in September – a 30% decline throughout the quarter.”

“The continued decline through September is especially significant. August typically experiences a softening in recruitment activity as businesses and candidates take time away from the market, but vacancies did not recover as companies returned after the summer break. Instead, September concluded with vacancies at their lowest point of the quarter, indicating that the slowdown extends beyond typical seasonal trends.”

Astbury also highlighted that these findings reflect a broader softening across the UK recruitment landscape. He pointed to the KPMG/REC Report on Jobs, which recorded another decline in vacancy demand in August alongside a notable increase in candidate availability. Meanwhile, permanent placements rose for the first time in nearly four years, suggesting that the market isn’t experiencing a complete hiring freeze. The Bank of England’s latest data supports this outlook, showing that recruitment efforts are increasingly centered on addressing specific skill shortages and supporting key growth initiatives.

“The takeaway from Q3 is not that London has stopped hiring, but that the criteria for hiring have become more stringent,” he explained. “Employers are prioritizing candidates who can fill immediate skill gaps, boost productivity, or directly contribute to growth and transformation. Certain professional sectors continue to show robust demand, including IT, tax, employment law, restructuring, and engineering consultancy. This indicates a more focused recruitment environment rather than a broad pullback from hiring altogether.”

“The upcoming Budget on October 28th may heighten this cautious sentiment,” Astbury noted. “Companies are already managing higher employment costs following the increase in employer National Insurance contributions, and uncertainty around potential policy changes could lead some employers to postpone non-essential hiring decisions until they have clearer guidance.”

Astbury concluded, “The key question now is whether September’s performance reflects a temporary dip in momentum or signals the start of a more prolonged period of caution as we move into Q4.”

Source link